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Testing the Reference-Dependent Model: A Laboratory Search Experiment

Takahiro Miura (), Keigo Inukai and Masaru Sasaki ()
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Takahiro Miura: Kansai University
Keigo Inukai: Meiji Gakuin University
Masaru Sasaki: Osaka University

No 12378, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Our paper conducts laboratory experiments with the sequential search model to test whether participants engage in search activities in line with theoretical predictions derived from the expected utility model or the reference-dependent model, without assuming any specific formulation rule for a reference point. Our experimental results showed that the participants' search behavior did not align with the reference-dependent model. In addition, the correlation between individual preferences and search behavior reinforced our experimental results; that is, loss aversions were not significantly correlated with search behavior.

Keywords: sequential search; loss aversion; risk preference (search for similar items in EconPapers)
JEL-codes: D81 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
Date: 2019-05
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